Entering Voltaire: poll experiment live on mainnet
A public, permissionless blockchain such as Cardano needs a governance system that not only accepts but actually encourages participation from the entire community. In fact, even before adopting a particular system, the various members of the ecosystem should be consulted, using a mechanism to foster discussions that forecasts what will happen in the future governance system.
The Cardano Foundation knows the importance of testing mechanisms beforehand, and of doing so in a way that actively involves all members of the Cardano ecosystem. In this spirit, we launched a poll experiment for stake delegators and stake pool operators (SPOs) alike.
The first phase inquired about the level of satisfaction with the current rewards and incentives scheme. To account for potential imperfections while simultaneously spurring contributions and collaborations, this initial phase took place in a testnet environment. It concluded last Wednesday, 10 May 2023, when the redelegation epoch closed.
Anyone interested can consult the results on Adastat’s dashboard for the PreProd Testnet poll, or on Cardanoscan’s own PreProd dashboard, and verify how each stake pool operator voted. The dashboards also make it clear that, though the poll captures validated data, the result numbers themselves can be counted and organized in different ways leading to rather disparate conclusions. For instance, the percentage of dissatisfaction appears overwhelming when grouping results per delegators, but diminishes significantly if looking at either pools or stake values.
Data analysis, however, does not fall within the scope of the experiment. The Foundation plans, designs, and organizes the poll. Until we enter Voltaire’s full set of decentralized governance, a decision about which parameters to use and how to apply them to interpret the data, falls to the combined responsability of IOG, EMURGO, and the Foundation itself. Although we hope the discussions and insights gained from the on-chain poll will show relevant ways to use polls for surveying a public majority, and consequently help create robust mechanisms for governance participation, this nonetheless remains an initial step meant to assess possibilities.
If we as an ecosystem wish to develop a decentralized, as well as effective system of on-chain surveys that can genuinely improve the Cardano space and make it more resilient, multiple aspects require careful consideration. Including which questions to pose and how to do so. For precisely this reason, the Cardano Foundation meticulously pondered both the content and the format of the on-chain phase question.
A binary question might have a direct simplicity that renders it appealing, yet it provides little to no insights into why voters went in one direction or the other. It would only show how many people like or dislike an idea, thus complicating any attempt at deriving conclusions from the results. A multiple choice question, on the other hand, would allow for more options and greater understanding of the opinion distribution, yet it could still hamper interpretation. To surpass these limitations, a multiple choice question would need options capable of giving voters a good range of choices while simultaneously attaching some kind of reasoning to each one. In the end, the Foundation settled for a straightforward multiple choice question with six options, four of which addressing two different factors:
Which setup would you prefer to be put in place from Q3 2023 onwards?
- Keep k at 500 and minPoolCost at 340 ada.
- Keep k at 500 and halve minPoolCost to 170 ada.
- Increase k to 1000 and keep minPoolCost at 340 ada.
- Increase k to 1000 and halve minPoolCost to 170 ada.
- I would prefer to abstain.
- None of the above.
As a way of foreshadowing future polls about critical aspects of mainnet governance, we picked an often debated theme within the ecosystem: the k parameter and its interaction with the absolute ada value for minimum pool cost.
If a small handful of stake pools were to concentrate most delegated stake, they would effectively control the system, turning it into a centralized network. To ensure genuine decentralization, it becomes essential to discourage a situation where a few pools aggregate most funds. So a mechanism was put in place to automatically diminish a given pool’s rewards when stake delegation to that pool exceeds a certain amount. The k parameter activates this mechanism. In this equation, k represents the desirable number of equal size pools giving their stake delegators the same amount of rewards. It currently sits at 500 pools. The minPoolCost, on the other hand, has a present value of 340 ada and corresponds to the amount of pool rewards deducted each epoch from each stake pool’s rewards before distribution to stake delegators.
Focusing the question on the k and minPoolCost parameters allows us to better perceive the ecosystem stance on fundamental issues that directly affect the decentralization of the network. Likewise, offering options with two concrete yet different values for both k and minPoolCost deters the wide, potentially unrepresentative variation of open-ended questions while still creating an informative survey that can help to understand not only if the ecosystem wishes to change the values of these parameters but, if so, by how much. Finally, introducing an option to depict abstention plus an additional one for those who do not wish to abstain but also disagree with the proposed values, accounts for the limitations of the other four possibilities.
The on-chain poll will go live on mainnet following the Monday 15 May 2023 start of a new epoch.
A frequent remark by SPOs during the testnet phase highlighted the need to extend the voting period. The Foundation has therefore adapted the schedule of the second phase. After the question gets published, SPOs will have until the end of the next epoch to vote. A period of two additional epochs will then give stake delegators the time to consult the dashboards, see how SPOs voted, examine the results, and decide whether or not to redelegate their stake to another SPO. Afterwards, the Cardano Foundation will snapshot the results and draft a report.
The on-chain poll was specifically designed to address the entire Cardano community, and only with wide involvement from various parties can it lead to significant conclusions. The Foundation hopes that everyone will take part in it: the SPOs by voting, the other ada holders by considering the action of the stake pool operator responsible for the pool they delegate to and rethinking their delegation if they disagree with the SPO’s attitude.
In addition, the Cardano Foundation would like this experiment, now live on mainnet, to trigger new debates, contributions, and collaborations. Voltaire means active as well as informed and conscious participation at multiple levels. In the road towards a true self-sustaining, genuinely decentralized network, we need the voices of all.